Google pushes into mobile payment with Android Pay launch in U.S.

People visit an Android stand at the Mobile World Congress in Barcelona March 4, 2015. REUTERS/Gustau Nacarino

(Reuters) - Google Inc said it would roll out Android Pay, a one-touch payment app on Android devices, in more than 1 million locations in the United States on Thursday.

The payment service can be used through Android devices with near-field communication (NFC) technology and Google's KitKat 4.4+ operating system. (bit.ly/1FzHUrd)

Android Pay will compete with Apple Inc’s Apple Pay in the mobile payments market, which research firm IDC estimates at $1 trillion in 2017.

Existing users of Google Wallet app can access Android Pay through an update, while new users can download it from Google Play store in the next few days.

Google’s shares rose 1.4 percent to $652.74 in afternoon trading.

The company said the payment service could be used at stores operated by companies including Aeropostale Inc, Macy’s Inc, GameStop Corp and Staples Inc.

Android Pay will be made available in more locations over the next few days and more features will be added to it in the coming months, Google said in a blog post.

Android Pay will support credit and debit cards on payment networks of American Express Co, Discover Financial Services, MasterCard Inc and Visa Inc and cards issued by banks such as Bank of America and U.S. Bank, among others.

Google said Citigroup Inc and Wells Fargo & Co would also be added to the list in the next few days.

As part of security, the service is supported by the industry standard “tokenization” card-security service.

Tokenization service substitutes random numbers for a user’s credit card details when a merchant transmits transaction data, reducing the risk of online theft.

The app will come preinstalled on new NFC-enabled phones from wireless carriers AT&T Inc, T-Mobile US Inc and Verizon Communications Inc.